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Treasury Secretary Scott Bessent Tuesday morning said the Trump administration is committed to lowering interest rates.
By James Van Straten, CoinDesk Bot|Edited by Stephen Alpher
Mar 4, 2025, 2:37 p.m. UTC
What to know:
- Treasury Secretary Scott Bessent reaffirmed his commitment to lowering interest rates in a recent interview with Fox News.
- Weeks ago on the verge of writing off any rate cuts in 2025, markets are now fully expecting the Fed to trim three times this year.
- Inflation, though, remains a challenge, with the annual pace rising of late to 3%.
As if the bursting of a speculative bubble in memecoins wasn’t enough to send crypto markets tumbling over the past weeks, a general risk off sentiment in traditional finance is adding to the pressure.
Perhaps in a bit of a speculative bubble themselves, the major U.S. stock market averages have been in quick retreat of late, triggered by a series of tariff threats from President Trump. Threats no more, 25% levies against goods from Mexico and Canada went into effect today, among additional taxes on Chinese goods.
STORY CONTINUES BELOW
Falling another 2.6% yesterday and down in early action Tuesday, the Nasdaq today now sits below the level it was at prior to Trump winning the election in November.
“We’re set on bringing interest rates down,” Treasury Secretary Scott Bessent stated in an interview with Fox News Tuesday morning.
Indeed, the 10-year Treasury yield currently stands at 4.13% versus 4.80% just prior to the Trump inauguration six weeks ago.
At the short end of the curve, markets are dramatically repricing expectations for Fed rate cuts in 2025. The odds of at least one rate cut by the Fed’s May meeting have risen to 47% versus just 26% one week ago, according to the CME FedWatch Tool. The chances of two or more rate cuts by the June meeting have jumped to 36% from 15% one week ago.
Crypto Daybook Americas alluded to potential rate cuts that could help lift depressed crypto prices, though the economy remains far from a return to quantitative easing.
While lower rates might seem like an easy fix, the challenge lies in balancing inflation, which currently stands at 3% year-over-year after four consecutive months of increases. The last time headline inflation was at or below the Fed’s 2% target was back in February 2021.
The Federal Reserve must navigate a delicate balance — easing rates to help keep the economy out of recession without pushing inflation even higher.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.
James Van Straten is a Senior Analyst at CoinDesk, specializing in Bitcoin and its interplay with the macroeconomic environment. Previously, James worked as a Research Analyst at Saidler & Co., a Swiss hedge fund, where he developed expertise in on-chain analytics. His work focuses on monitoring flows to analyze Bitcoin’s role within the broader financial system.
In addition to his professional endeavors, James serves as an advisor to Coinsilium, a UK publicly traded company, where he provides guidance on their Bitcoin treasury strategy. He also holds investments in Bitcoin, MicroStrategy (MSTR), and Semler Scientific (SMLR).
“CoinDesk Bot” indicates a generative text tool, typically an AI chatbot, contributed to the article. In each and every case, the article was edited, fact-checked and published by a human. Read more about CoinDesk’s AI Policy here.
